A happy start
ANAP Business Jets Limited (ANAP Jets) was founded on practicality and a desire to offer a missing service to Nigeria's developing economy. Liz Moscrop examines its business model
Fractional ownership is always an interesting business model. It has worked successfully in some regions, and fallen flat on its face in others. Nigerian businessman Atedo Peterside believes it could be a winner in his home country. Peterside who has an impressive track record as a financial investor moved into the world of fractional ownership last year with Embraer Phenom 300s, the world’s best selling business jet. ANAP Jets was the first buyer of this aircraft type in West Africa. When he did the maths he realised that a typical light business jet can fly for 600 to 1,000 hours a year, yet most owners only fly for 150 to 250 of them, so he saw a market opportunity. He refuses to take on an aircraft until it is fully funded – neither will he sell an aircraft fraction until he knows there is a jet available.
A condition of his first purchase was for Embraer to open a service centre in Lagos, which the Brazilian airframer duly did. ANAP Jets maintenance platform is operated in conjunction with Embraer, engine maker Pratt & Whitney and Eurofly Service, the technical partner and minority shareholder. More props come from the fact that Eurofly’s chairman is Rodolpho Baviera, who is also the Chairman of the European Business Aviation Association. Eurofly is ANAP Jet’s Continuing Airworthiness Management Organisation and is paid separately for that service. The Embraer Service Centre in Lagos is fully equipped with engineers and spares, which allows for easy maintenance of the company’s Phenom 300 aircrafts.
The aircraft are on a dry lease, since Nigeria has surplus pilots and flight attendants, although the firm employs some experienced expatriate captains, who have experience on the aircraft type. All its Nigerian pilots go to CAE Dallas in the USA for both initial and recurrent training, as do the engineers.
The range of the seven seater Phenom 300 is 1,971 nautical miles, which Peterside told Nigeria’s ‘This Day’ newspaper, is “more than sufficient for movement within our primary operating area,” i.e. Nigeria, West and Central Africa. ANAP Jets recently decided to also add the larger Embraer Legacy 600 to its fleet. This gives the company the operational capability to handle longer-range travel all over Africa and to Europe, South America and the Middle East (up to 3,400 nautical miles or 6,297 kilometres). The firm has applied for an Air Operators Certificate license, which will allow ANAP Jets to offer additional products i.e. jet cards and ad-hoc charter.
Peterside famously calls his company “the last mile,” and says he personally does not want to be in a private jet when he flies long haul from Lagos to London. He prefers large commercial jets such as operated by British Airways, Air France or Virgin Atlantic for that. He said to ‘This Day’: “I can get up halfway through the journey, and go on a stroll around the aircraft and stretch my legs. Conversely, I want to use an ANAP Jets seven-seater light business jet to take me efficiently from Lagos or Abuja to Bauchi, Port Harcourt, Makurdi, Jos, Owerri, Uyo, Asaba, Warri, Accra, Kumasi, Freetown, Douala, Yaounde etc.”
The firm’s vice president, sales & marketing, Gbemi Abudu pointed out: “We are not in the luxury business. Our typical client is a very highly disciplined individual or corporate. They may be very rich, but they still cannot justify owning a private jet all by themselves. They won’t commit investible dollars in an asset that doesn’t fly.” ANAP Jets’ customers only pay for occupied hours in flight and the company does not charge for empty legs.
The company’s business model starts with a share acquisition cost, which is a one-time investment and then a quarterly charge for the allotted flight hours. After five years, the aircraft is sold and the residual value of the aircraft is distributed pro-rata amongst all fractional owners.
“ We drive home the point that ANAP Jets offers a business tool that allows our owners to be more productive and efficient. A private jet allows businessmen to explore hinterlands that commercial airlines might not be able to easily access,” Abudu said.